Following periods of economic downturn, companies of all sizes and types frequently turn staffing agencies to help them refill vacancies that resulted from the previous downsizing initiatives that were needed to survive. In some cases, such staffing agencies provide suitable candidates for companies on a temporary basis, while in others candidates are provided for consideration for permanent employment; some agencies provide both temporary and permanent placements as well. Since staffing agencies are intimately involved in the human resource function, gaining a better understanding of how a successful organization competing in this industry achieves its goals represents a valuable and timely enterprise as well as how those activities relate to Saint Leo University's School of Business Common Body of Knowledge (CBK) -- Management Information Systems, Accounting, Economics, Management, Finance, Marketing, Legal, International Business, and Applied Decision Making. To this end, this paper analyzes XYZ Staffing, Inc.'s human resource functions and how they relate to the organization's strategic initiatives using the results of a telephonic interview with the owner, Ms. Sally Anne Staffer and a review of the relevant literature. A summary of the research and important findings that emerged from this analysis are presented in the conclusion.
Review and Discussion
Background and Overview
The research shows that the history of XYZ Staffing, Inc. (hereinafter alternatively "XYZ" or "the company") reflects the finance and economics element of the CBK, with the entrepreneur involved having funded the enterprise entirely while assuming all associated risks. The company was founded in 1996 by Ms. Sally Anne Staffer in a midwestern state in the United States, as a sole proprietorship. Ms. Staffer reports that the company had previously been a secretarial service from 1980 to 1995 with the name, "Flying Fingers Secretarial Service, Inc." This enterprise was initially a home-based operation, but its early success resulted in the leasing of a suite of offices in a nearby office complex where the company provided a wide range of administrative support services. The widespread introduction of desktop computers and printers during the 1990s forced Ms. Staffer to revise her business model to reflect the changing times that were affecting the traditional social contract and the corresponding effect on the employment market.
The transition to a temporary staffing agency, though, occurred during a particularly fortuitous period in the country's history when more and more workers and businesses alike turned to these agencies for temporary employment assistance (Eberts, 2005). For instance, according to Gainey, Barnett, Davis, Bell and Curvino (2004), although the precise numbers of temporary employees placed remains uncertain, what is known is that the number of temporary employment agencies in the United States has increased significantly in recent years. These authorities report that, "The number of temporary agencies increased from about 100 in the mid-1980s to almost 1,500 in the mid-1990s. While temporary staffing agencies placed just under one million workers in 1990, 10 years later the industry had grown to just over 2.5 million workers. In fact, the temporary staffing industry experienced double-digit revenue growth throughout most of the 1990s" (p. 11). The findings that emerged from a recent study conducted by the Federal Reserve Bank of Kansas City indicated that a growing number of companies have opted for temporary staffing alternatives because of the cost-savings that can be achieved in fine-tuning their workforce to satisfy fluctuations in demand without long-term employment commitments on the part of the employer (Kliesen, 2004).
Although the focus is on providing employers with flexibility in their staffing, there are some advantages for employees who work for temporary staffing agencies as well. For instance, Gainey et al. (2003) add that, "Temporary employment may allow graduates to experience different occupations without making permanent commitments. Graduates in many fields today are faced with an extremely limited job market where competition for positions is intense. They may feel that other occupations may provide more opportunities" (p. 11). Working for temporary staffing agencies can therefore provide a means by which new entrants into the workplace can gain valuable on-the-job experience while also drawing a decent paycheck (Gainey et al., 2003). Given these benefits, it is not surprising that, "Many college graduates are using temporary staffing agencies to take a company out for a test spin, just as they would with a brand-new car" (Gainey et al., 2003, p. 11). Likewise, Flynn (1999) reports that, "Traditionally people took a job with a temporary service with the objective to find a permanent job. But you are starting to see more people now saying that they would like to have greater control over when and where they work and in essence becoming a temporary as a career" (p. 51). This point is also made by McBridge who emphasizes, "Permanent and temporary staffing agencies are becoming increasingly popular. They give you a chance to 'try out' different employers, jobs and work environments. They also can result in full-time and part-time permanent jobs, excellent networking contacts and valuable work experience" (2001, p. 52).
This growing popularity and double-digit growth in the temporary employment industry over the past several years is attributed by Burgess and Connell (2004) to several other factors as well, including the following in particular:
1. Temporary staffing agencies provide the temporal flexibility that is needed to accommodate daily, seasonal, and cyclical fluctuations in the quantity of labor inputs required;
2. Temporary staffing agencies provide functional flexibility, a means of accessing specialist skills and capacities on a selective and discontinuous basis; and,
3. Temporary staffing agencies provide companies with human resource support for the temporary employees assigned to them.
Since its transition to a temporary staffing agency in 1996, the company's strategic goal of consistent growth and potential franchising or licensing has produced modest success despite the lingering effects of the Great Recession of 2008, a trend that is reflective of the economics component of the CBK. The company has since grown to include Ms. Johnson and four other full-time employees, a part-time employee and dozens of temporary "staffers" that are dispatched on assignments of varying lengths to companies in need of temporary employees. The research also shows that a growing number of companies have turned to staffing agencies such as XZY for short- and long-term temporary employees in recent years (Laband & Mcclintock, 2001). For example, Burgess and Connell (2004) report that, "A growing and internationalized temporary agency industry has evolved over the past two decades to provide employers, large and small, public and private, with temporary labor and ancillary employment services" (p. 10).
While XYZ continues to provide clerical-type workers (i.e., secretaries, administrative assistants, bookkeepers, and data entry specialists) for temporary assignments, the company has increasingly been targeting professional positions as well. This trend in XYZ's business is consistent with trends in the larger industry. For instance, Gainey et al. (2004) report that, "No longer is temporary work primarily secretarial or administrative; professional positions are increasingly available" (p. 10). These professional positions have included advanced practice nursing positions and other paraprofessional assignments with law firms.
As with a number of other such staffing agencies, XYZ's contract stipulates that any temporary employee may be hired on a permanent basis if appropriate notification is provided and a placement fee is paid. To date, Ms. Staffer reports having placed about 10 of her part-time staffers in permanent positions with various companies over the years but emphasizes that this is actually a relatively undesirable outcome from her perspective for many of her staffers because it means a loss of ongoing revenues despite the payment of the one-time placement fee. Nevertheless, many companies prefer to have the opportunity to evaluate temporary employees' performance and use these services specifically for recruiting permanent employees. For instance, Flynn emphasizes that, "The temp-to-perm approach has many benefits for the employer. It is a good chance for a manager to really take a look at a person and know that the person is a good performer" (1999, p. 51).
The company's real "bread-and-butter," though, remains firmly focused on the ongoing fees that XYZ's temporary employees generate because it was this business model that XYZ has followed in achieving a competitive advantage and sustaining it over time. This management decision to concentrate on a core competency is also reflective of the CBK. Although XYZ serves a core set of businesses that provide a fairly reliable series of assignments over time, this segment of the company's business has far outpaced its permanent placement activities. In fact, the company's owner describes an ultimate vision of franchising or licensing her operation in the same fashion as the industry leaders such as Manpower, Key and Kelly. In this regard, Burgess and Connell report that, "Manpower pushed out from its base in the Midwest primarily through the sale of local franchises across the country, while Kelly pursued a similar strategy through licensing agreements, the two companies expanding their sales volumes almost five-fold" (2004, p. 27).
In the meantime, XYZ's strategic approach continues to involve direct competition against its larger counterparts such as Manpower and Kelly Services…